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How big a problem is digital piracy? Who knows?

One of the best ways to start a flame war online: make a claim about the costs of online piracy.

Some, of course, argue that online piracy isn’t a problem. Free downloads are free promotion, the argument usually goes. Others, especially those in media industries that have found adjusting to the internet difficult, claim that online piracy is responsible for their woes.

One of the most widely-promoted claims: that intellectual property infringement is responsible for the loss of up to $250bn each year in the United States alone. Claims like this are often touted as truth, but are they?

According to the U.S. government’s Government Accountability Office (GAO), not quite. In a Congressional report (PDF) that sought to quantify the impact of “counterfeit and pirated goods“, the GAO came to a conclusion that is either surprising or not surprising, depending on where you stand:

Because of the significant differences in types of counterfeited and pirated goods and industries involved, no single method can be used to develop estimates. Each method has limitations, and most experts observed that it is difficult, if not impossible, to quantify the economy-wide impacts.

The GAO does say there’s reason to believe the problem is “sizeable“, but most of the figures that are used to back up specific claims are basically hogwash:

Three commonly cited estimates of U.S. industry losses due to counterfeiting
have been sourced to U.S. agencies, but cannot be substantiated or traced back
to an underlying data source or methodology.

This statement applies to the $250bn figure mentioned above. According to the GAO’s report, “This estimate was contained in a 2002 FBI press release, but FBI
officials told us that it has no record of source data or methodology
for
generating the estimate and that it cannot be corroborated.“

Which begs the question: if widely-promoted claims that purport to demonstrate the extent to which intellectual property infringement is causing significant economic harm, why are governments going to increasingly ridiculous lengths to cut off their noses to spite their faces?

Obviously, intellectual property infringement is a real issue worthy of discussion, especially as it relates to the internet, which has made infringement of certain kinds of products far easier, and has implicated consumers in behavior that, offline, is usually controlled in a for-profit fashion by organized crime.

But even if one assumes for argument’s sake that online piracy costs businesses billions of dollars and economies hundreds of thousands of jobs, it’s also undeniable that the opportunities created by the internet have generated untold billions of dollars and millions of jobs around the world.

Which gets to the final and most important point the GAO report raises: if politicians around the world are going to create regulations that will strangle individuals and businesses online, all in the name of fighting piracy, shouldn’t they at least have the numbers to support their efforts? If they did, they might discover that they’re basically trading economic gold for economic aluminum.

The iPhone OS 4 SDK was released last week, but it’s not all good news
for iPhone (and iPad) developers. That’s because Section 3.3.1 of the iPhone Developer
Program License Agreement comes with a new catch:

Applications may only use Documented APIs in the manner prescribed by
Apple and must not use or call any private APIs.

State-level bureaucrats in the United States have their eyes fixed on
Amazon and other online retailers. The reason: online shopping, in
theory, results in less tax revenue for their states because these
retailers don’t collect sales tax in states in which they have no
physical presence.

Up until now, a number of states have sought to force Amazon and others
to collect sales tax through legislation that would use in-state
affiliates to create ‘nexus‘. With nexus established, online retailers
would be legally responsible for collecting sales tax.

Comedic site CollegeHumor.com is known for pranking its friends and audience, but those jokes don’t often involve free corporate publicity. Not so this week, when the site pulled an elaborate prank on New York, pretending that beloved West Coast burger chain In-N-Out would open a New York outpost this summer.

It worked. Sites like EaterGuest of a Guest and Feast all picked up the news. And aside from advertising In-N-Out, CollegeHumor gave New York a taste of how it does advertising.

April 2nd 201019:09

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